Saving the sugar industry

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PRESIDENT David Granger took the bold step last Friday in visiting the sugar belt in Berbice, interacting with workers as well as school children during a tour in which he renewed his government’s commitment to saving the industry.

Noting that the sugar industry is being restructured so that it can be revived, President Granger assured workers at the Albion Sugar Estate in Berbice that the sector is going to recover from the difficulties it is facing. The President also made a commitment to engage with the unions representing sugar workers in order to chart a course forward for the industry’s development.

According to a statement from the Ministry of the Presidency, the Head of State committed to ensuring that a stronger, smarter, sustainable and more profitable sugar industry is built and workers’ jobs are safeguarded. He also committed to ensuring that the $30 billion syndicated bond that has been secured by the Special Projects Unit (SPU) of the National Industrial and Commercial Investments Limited (NICIL) is transferred to GuySuCo within a short space of time so that urgent needs can be met.

Touching on the issue of the downsizing of the industry, President Granger told the workers that the consolidation of the Berbice and West Demerara plantations is part of a Corporate Restructuring plan and that unfortunately, this resulted in the separation of several thousand of workers from the industry. However, he said while the government regrets the outcome, it is not the first time that hard choices have had to be made to ensure the sustainability of the industry.

No one would deny that sugar forms the core of Guyana being — from slavery though indentureship, and from plantocracy to nationalisation. Though considered “bitter,” sugar has been a major pillar of the Guyana economy and has garnered critical foreign currency from export earnings.

The task of sugar workers has been daunting, as much of the field work is back-breaking and arduous. Yet, for almost two centuries, our workers persevered and made great advances in securing safer working conditions and better pay. However, in the past two decades, the fortune of sugar has taken a dip with the reduction by over one-third of the preferential price of sugar on the European Union market. If that were alone a major blow, the dramatic and consistent drop in production has compounded Guyana’s misery. Production fell from an average 320,000 tonnes between 2002 and 2004 to below 250,000 tons. In 2003, production fell to its lowest since 1940, with only 186,000 tonnes being produced. At the same time, due to several factors including incompetence and political interference under the PPP administration, the industry’s cost of production rose much higher than the market price for sugar, totalling over $50B in losses between 2010 and 2014. At the same time, keeping workers on the payroll was costing more, as the cost rose from $14.5B in 2010 to $20.5B in 2014, an increase of $6.3B or 43%. In order to meet these costs, the PPP government was forced to divert sizeable sums of taxpayers’ money to bail the industry out and prevent collapse that would bring ruin to the 16,000-plus sugar workers.

It cannot be argued that the current problems facing the sugar industry have been inherited from the previous administration. The “Turnaround Plan” “Business Plan” “The Way Forward”, all fancy slogans, gave no answer for the decline. Sugar was in deep trouble by the time the coalition government took office in May 2015. Its priority attention was how to save the jobs of sugar workers and breathe life into the dying industry. Initially, the new government threw out a bail-out package amounting to $12B for this year and may be ready to extend a similar life-line next year.

The sugar industry affects the welfare of all on the coastland. Where the private sector, in recent times, had seized the opportunity to speak out against future plans and stayed silent in the past to its impending implosion is regrettable. More importantly, that the PPP/C has used every opportunity to make the proverbial political hay with the crisis cannot be ignored. The PPP/C had several opportunities before 2015 to put GuySuCo on a path to self-sustainability if the assumption is being taken that that is the party’s interest. Ensuring the sustainability of the corporation would have seen the party making a presentation to the Stakeholders Consultation that started in 2016, doing fan-out with the communities in Regions 3, 4, 5 and 6, which would have given the impression it cares. Instead, the sugar workers were once again used and betrayed by a party who only sees its survival, making them their footstool.

The excuse that was given for not submitting a proposal is that government must first conduct a socio-economic impact study is an exemplification of the PPP/C’s inept management of the corporation. The PPP/C could not have awakened in 2016 and realise the necessity for such an approach, they would have had to know whether this was needed or not in their 23 years in government. Outside of making the corporation board and management the party’s source of giving their colleagues fat pay cheques without delivering, they looked on uncaringly at the industry imploding.